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Inflation? Where?


Yo, you disinflationing me?


Today's Philly Fed report, coming in at -2.2 versus expectations of +10, was notable for the following:

Prices Paid (Input costs): 23.5 vs 30.9 last month

Prices Received: 8.1 vs 15.7 last month

Now, add this to the following data points from the last few weeks of macro data:

NY Fed survey:

Prices paid: 30.6 vs 41.6 last month.

Prices received: 2.0 vs 8.0 last month

Import price index: -1.3% m/m vs -0.4% exp.

ISM prices paid: 58.0 vs 67.5 exp.

This indicates broad-based price disinflation given the breadth of the survey data in these reports. So far it has, of course, resulted in MORE financial speculation given the moral hazard play of: "a less hawkish fed = more liquidity."

To the extent this trend continues at this pace, it remains probable that these gathering forces will too affect assets as they are affecting 'real' production goods and services.

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